ByValentina Jovanovski, ContributorApril 4, 2013

Hungary's Prime Minister Viktor Orban holds a news conference ahead of a European Union leaders summit in Brussels last month. Mr. Orban's government pushed through a set of controversial constitutional amendments that came into effect on Monday. Many in the European government are concerned that the amendments violate EU law and constrain basic human rights and freedoms.

Budapest, Hungary — Amid growing concerns that the Hungarian government has taken steps to centralize power and weaken democratic principles in the country, a growing movement in the European Union is considering what should be done to keep Hungary in line.

On Monday, the latest set of amendments to the Hungarian constitution – the fourth set since its passage in 2011 – came into effect, having been pushed through by Prime Minister Viktor Orbán and his conservative Fidesz party’s two-thirds majority in parliament.

Critics say the new amendments erode the authority of the Constitutional Court, which overturned several Fidesz-backed laws in recent months. Hungary has also clashed with the EU regarding changes to the country’s media laws and the independence of its central bank.

Last week, EU Justice Commissioner Viviane Reding said the changes in judicial independence in Hungary were “very worrying,” according to Dow Jones. The Hungarian government responded by stating on its website that Ms. Reding was “waging private war against Hungary.”

The amendments limit the Constitutional Court’s ability to refer to its own rulings prior to January 2012, when the current constitution came into effect, thereby effectively cutting a large portion of established legal decisions out of the country's law. Instead, the amendments restrict the court to only reviewing amendments to the constitution based on procedural requirements, rather than substance.

“There is nothing to be concerned of,” says József Szájer, member of the European Parliament (MEP) from Fidesz. Mr. Szájer says the amendments are “not curtailing the powers of the Constitutional Court but expanding it” by giving the court the ability to determine if new amendments follow proper constitutional procedures.

Hungary welcomes the review of the CoE, he says, but constitutional affairs of member states should be respected by the EU.

But CoE spokesman Panos Kakaviatos said in an email that his organization was concerned that the amendments include provisions that were previously rejected by the Constitutional Court, as this “could endanger the fundamental principle of checks and balances in a democracy.” By incorporating the provisions into the constitution itself, Fidesz effectively does an end run around the court, realizing the changes that the court rejected as undemocratic.

The results of the CoE’s review are expected to be released in June.

EU institutions have shown varying degrees of political will to act on Hungary. The Commission has been relatively cautious in its criticism, while MEPs have been more vocal.

“The Commission is after all a neutral arbitrator,” says Agnes Batory, public policy professor at Budapest’s Central European University. “They cannot act in an overtly political way, as opposed to party groups within the European Parliament.”

Nuclear option

As for what to do now, the EU has several options at its disposal.

The most serious option is launching Article 7 procedures – also referred to as the “nuclear option” – against Hungary. Those procedures can strip a country of some of its rights within the EU, including voting rights, if found in serious breach of fundamental values relating to democracy, human rights, and the rule of law.

In 2012, EU Commissioner for the Digital Agenda Neelie Kroes said she would consider asking the Commission to apply Article 7 if Hungary did not reform its media laws. MEP Guy Verhofstadt has also recently stated he would call on the European Parliament to initiate these procedures over the constitution issue.

However, Article 7 has never been used and it is unlikely to be invoked in Hungary’s case. A four-fifths majority in the European Council would be required, and such consensus in the EU is rare. Countries are also reluctant to establish a precedent by allowing the Union to interfere in constitutional matters.

Other options

Alternatively, the EU could impose economic sanctions. Under the excessive deficit procedure (EDP) – a tool that allows Europe to rein in member-state budgets – it can strip "cohesion funds," which finance development projects, from states that do not keep budget deficits below 3 percent of GDP.

Although this procedure is related to financial indicators rather than democratic ones, the Commission could use the threat of economic sanctions as leverage on the constitutional issue. This approach may be “the clearest line of pressure” on the Hungarian government, says Ms. Batory.

Hungary is already being monitored under the EDP and, in 2012, the EU temporarily suspended 495 million euros ($636 million) in funding to the country for failing to take sufficient measures to reduce its deficit. The suspension was lifted a few months later, after Hungary proved that it was implementing the EU’s recommendations and was set to reach its deficit target for the year.

The European Commission can also file infringement procedures where it believes a member state is in breach of EU law. This judicial mechanism has been used to tackle specific legislation in Hungary deemed to violate EU regulations, such as a law that reduced the retirement age of judges from 70 to 62. However, infringement procedures must be launched against specific laws and cannot be applied to broader violations of values and human rights in the country.

Many in the EU are waiting for the results of the CoE’s review before deciding what steps to take next. Still, an increasing number of voices suggest something needs to be done.

“We cannot say this is not a problem of the European Union and only a problem of the Hungarian people,” says Mate Daniel Szabo, director of the Eötvös Károly Institute think tank. “Because at the end of the day, there will be a country in the middle of Europe where the government is unchangeable and the idea of constitutionality is forgotten.”